It was quite a sight last week. As the TATA owned Air India announced the biggest ever aviation deal anywhere in the world- with the order of 470 planes from Europe’s Airbus and America’s Boeing - Prime Minister Modi, President Biden, President Macron and Prime Minister Rishi Sunak all lauded the move, very unusual for a private deal, but one that signifies its global impact.
The statement from President Biden hailed the agreement, calling it “historic”, saying it would create over one million American jobs across 44 states.
With the Airbus agreement, comes a deal with Britain’s Rolls Royce for engines, which is why Rishi Sunak described it as a huge win for the UK’s aerospace sector, that would help deliver jobs.
From a larger strategic point of view, this Air India deal has been hugely significant for India, which initially faced Western flak for oil imports from Russia in the midst of the Ukraine war.
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As many leading economies struggle with a slowdown and recession, an Indian deal creating millions of jobs here sends a message that the world has to do business with India.
Much needed turnaround
For Air India itself, this will hopefully mark the start of a much needed turnaround for the airline, once considered amongst the best in the world, but a rather pale shadow of it’s former self today. The TATAs took over the airline over a year ago and charted a five year roadmap for the it’s expansion. That includes a new fleet.
The Air India CEO, Campbell Wilson, has said the first planes to arrive will be 25 new Boeing 737-800s and 6 Airbus A350-900s in the second half of this year.
Increasing Air India’s domestic market share is also a key goal of the airlines new management. Currently the market leader is Indigo, with 55 percent of the marketshare. Air India comes in way behind at just 9%.
Official data shows that India’s aviation market has seen a huge recovery after the pandemic, especially the domestic market. Passenger traffic increased by 47 percent to 123 million in 2022, compared to the slump due to Covid-19 in 2020 and 2021.
Frontline global player
The new fleet will also help Air India become a frontline global player in the aviation space. But Air India will need to do much more to reclaim it’s position as a world class airline. New planes are not enough. Over the years, the airline has acquired a bad reputation when it comes to it’s services and cabin maintenance.
I have lost count of the number of horror stories of rats being spotted on board, to tattered seats and of course the recent "pee gate” incident which shocked the country.
Screens that don’t work inflight or headphones that are broken have been par for the course on Air India for years. A bloated employee to aircraft ratio symbolised its deep rooted problems. I had stopped flying the airline altogether.
However, my view has started to change in recent months. Since the TATA takeover, there has been a small but perceptible change.
The service is better, so is the food. The flights are on time. The online app is so much easier to navigate than before. Yes, there is a long way to go, but the small things matter and I know I am back on board, looking forward to what comes next.
